BTW, I sold my ES calls into today's bounce, and for now I just day trading on this choppy market till the Fed day .......................
Edited by redfoliage2, 07 December 2023 - 11:31 AM.
DOVISH FED, SEASONALITY favor BULLS
Started by
dTraderB
, Dec 03 2023 05:44 PM
78 replies to this topic
#62
redfoliage2
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Posted 07 December 2023 - 03:02 PM
After hitting the bottom of the range yesterday it touched the top of the range today ............................
Edited by redfoliage2, 07 December 2023 - 03:08 PM.
#63
redfoliage2
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Posted 07 December 2023 - 03:18 PM
Now it's going to be a wild card for tomorrow ............................
Edited by redfoliage2, 07 December 2023 - 03:20 PM.
#64
dTraderB
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Posted 07 December 2023 - 06:01 PM
US Markets dull recently, confined to ES 4554 TO 4590 rNge, basing, shallow pullbacks, coiling, ready to launch a monstrous December rally. But different in ASAIN markets:
Japanese markets reel as BOJ flexes muscles
There were plenty of fireworks in Japanese markets on Thursday, sparked by comments from BOJ Governor Kazuo Ueda about the exit from decades of ultra-low interest rate policy - the yen and bond yields soared, and stocks slumped.
These moves bear repeating, as they are a measure of how historic the BOJ's shift is and how sensitive markets are to it.
The yen's 2.7% surge against the dollar - it had gained as much as 4% earlier in the day - was its biggest in a year. There have been only seven better days for the yen in the last decade.
The five-year Japanese Government Bond yield recorded its biggest rise since the pandemic of almost 10 basis points - it has registered bigger daily spikes on only four occasions in the last 20 years.
Long-dated JGB yields spiked sharply higher too after a dismal auction of 30-year paper - the bid-to-cover ratio was the lowest since 2015 at 2.62, and the tail - the difference between the lowest bid and the average bid - was the longest on record.
The timing and scale of Japan's inflation-fighting rate hikes is critical. Japan is the world's largest creditor nation, so the potential repatriation flows are huge; while the yen is near its lowest, and the Nikkei stock market is near its highest, in more than 30 years.
Key developments that could provide more direction to markets on Friday:
Japan GDP (Q3, final)
Japan household spending (October)
India interest rate decision
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
Japanese markets reel as BOJ flexes muscles
There were plenty of fireworks in Japanese markets on Thursday, sparked by comments from BOJ Governor Kazuo Ueda about the exit from decades of ultra-low interest rate policy - the yen and bond yields soared, and stocks slumped.
These moves bear repeating, as they are a measure of how historic the BOJ's shift is and how sensitive markets are to it.
The yen's 2.7% surge against the dollar - it had gained as much as 4% earlier in the day - was its biggest in a year. There have been only seven better days for the yen in the last decade.
The five-year Japanese Government Bond yield recorded its biggest rise since the pandemic of almost 10 basis points - it has registered bigger daily spikes on only four occasions in the last 20 years.
Long-dated JGB yields spiked sharply higher too after a dismal auction of 30-year paper - the bid-to-cover ratio was the lowest since 2015 at 2.62, and the tail - the difference between the lowest bid and the average bid - was the longest on record.
The timing and scale of Japan's inflation-fighting rate hikes is critical. Japan is the world's largest creditor nation, so the potential repatriation flows are huge; while the yen is near its lowest, and the Nikkei stock market is near its highest, in more than 30 years.
Key developments that could provide more direction to markets on Friday:
Japan GDP (Q3, final)
Japan household spending (October)
India interest rate decision
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
#65
dTraderB
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Posted 07 December 2023 - 06:03 PM
ADAM: After a 470 point rally in November, ES has been in what I call post-rally hangover mode, spending over two weeks in one of the most stubborn (yet lucrative) consolidations of 2023. After a move like we had in November, the market has two options: 1) A sharp selloff or 2) Weeks of consolidation. Its been clear since Nov 25th that the market chose 2.
The range has generally been 4550-56 to 4575-80, with multiple excursions above and below. Why did I mention above that its been a lucrative consolidation?. Because the 4556 level has tested 32 times, most of which paid out with large 20-40 point rallies, and trading the last two weeks has been as simple as buying it over and over.
We are finally nearing some catalysts though to break us out of the range. NFP tomorrow, CPI Tuesday, FOMC Wednesday (the latter two are most important), along with futures rollover starting tomorrow + OPEX coming up next Friday. This range wont last.
The range has generally been 4550-56 to 4575-80, with multiple excursions above and below. Why did I mention above that its been a lucrative consolidation?. Because the 4556 level has tested 32 times, most of which paid out with large 20-40 point rallies, and trading the last two weeks has been as simple as buying it over and over.
We are finally nearing some catalysts though to break us out of the range. NFP tomorrow, CPI Tuesday, FOMC Wednesday (the latter two are most important), along with futures rollover starting tomorrow + OPEX coming up next Friday. This range wont last.
#66
dTraderB
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Posted 08 December 2023 - 07:40 AM
My FF is JOBS REPORT slightly bearish but markets shrug it off & finally break out to close above 4600, a ST TOP.
"Markets freeze for jobless recession gauge
The standing consensus forecasts are for a 180,000 rise in non-farm payrolls last month, an unchanged jobless rate at 3.9% and a cooling of annual wage growth to 4.0%.
But this week's private sector jobs report for the same month was below forecast, weekly jobless crept higher, layoffs are rising sharply, job openings fell faster than expected for October and employment costs were revised down.
But a curious twist this month centres the closely-watched 'Sahm rule' threshold, that has historically shown recession is underway when the three-month rolling average unemployment rate rises half a point above the low of the prior 12 months.
Developed by Fed economist Claudia Sahm before the pandemic as a potential rule of thumb for triggering benefit payments - the gauge hit 0.33% last time out for the first time since March 2021 and could sound the alarm if November's jobless rate tops 4%.
An added complication reading the report is the ending of the autoworkers and actors' strikes that have distorted jobless readings somewhat.
About 25,300 members of the United Auto Workers union ended their strikes against Detroit's "Big Three" car makers on Oct. 31, which had depressed manufacturing payrolls that month. Payrolls also likely got a lift from 16,000 members of the SAG-AFTRA actors union going back to work." -' REUTERS
"Markets freeze for jobless recession gauge
The standing consensus forecasts are for a 180,000 rise in non-farm payrolls last month, an unchanged jobless rate at 3.9% and a cooling of annual wage growth to 4.0%.
But this week's private sector jobs report for the same month was below forecast, weekly jobless crept higher, layoffs are rising sharply, job openings fell faster than expected for October and employment costs were revised down.
But a curious twist this month centres the closely-watched 'Sahm rule' threshold, that has historically shown recession is underway when the three-month rolling average unemployment rate rises half a point above the low of the prior 12 months.
Developed by Fed economist Claudia Sahm before the pandemic as a potential rule of thumb for triggering benefit payments - the gauge hit 0.33% last time out for the first time since March 2021 and could sound the alarm if November's jobless rate tops 4%.
An added complication reading the report is the ending of the autoworkers and actors' strikes that have distorted jobless readings somewhat.
About 25,300 members of the United Auto Workers union ended their strikes against Detroit's "Big Three" car makers on Oct. 31, which had depressed manufacturing payrolls that month. Payrolls also likely got a lift from 16,000 members of the SAG-AFTRA actors union going back to work." -' REUTERS
#67
dTraderB
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Posted 08 December 2023 - 07:41 AM
"
a sharp downward revision to Japanese economic growth data for the third quarter.
Japan's economy contracted 2.9% - faster than the 2.1% drop first estimated as the household sector faced growing headwinds and complicating the central bank's efforts to phase out its super easy monetary policy.
Dollar/yen pushed back above 144, having hit a low of 141.70 at one point on Thursday. Tokyo's benchmark Nikkei underperformed largely firmer world stocks and lost more than 1% on Friday.
The waning U.S. crude oil price - now down 27% since the peaks of September and encouraging disinflation and rate cut hopes - steadied and tried to get a toehold back above $70 per barrel."
a sharp downward revision to Japanese economic growth data for the third quarter.
Japan's economy contracted 2.9% - faster than the 2.1% drop first estimated as the household sector faced growing headwinds and complicating the central bank's efforts to phase out its super easy monetary policy.
Dollar/yen pushed back above 144, having hit a low of 141.70 at one point on Thursday. Tokyo's benchmark Nikkei underperformed largely firmer world stocks and lost more than 1% on Friday.
The waning U.S. crude oil price - now down 27% since the peaks of September and encouraging disinflation and rate cut hopes - steadied and tried to get a toehold back above $70 per barrel."
My FF is JOBS REPORT slightly bearish but markets shrug it off & finally break out to close above 4600, a ST TOP.
"Markets freeze for jobless recession gauge
The standing consensus forecasts are for a 180,000 rise in non-farm payrolls last month, an unchanged jobless rate at 3.9% and a cooling of annual wage growth to 4.0%.
But this week's private sector jobs report for the same month was below forecast, weekly jobless crept higher, layoffs are rising sharply, job openings fell faster than expected for October and employment costs were revised down.
But a curious twist this month centres the closely-watched 'Sahm rule' threshold, that has historically shown recession is underway when the three-month rolling average unemployment rate rises half a point above the low of the prior 12 months.
Developed by Fed economist Claudia Sahm before the pandemic as a potential rule of thumb for triggering benefit payments - the gauge hit 0.33% last time out for the first time since March 2021 and could sound the alarm if November's jobless rate tops 4%.
An added complication reading the report is the ending of the autoworkers and actors' strikes that have distorted jobless readings somewhat.
About 25,300 members of the United Auto Workers union ended their strikes against Detroit's "Big Three" car makers on Oct. 31, which had depressed manufacturing payrolls that month. Payrolls also likely got a lift from 16,000 members of the SAG-AFTRA actors union going back to work." -' REUTERS
#68
dTraderB
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Posted 08 December 2023 - 07:42 AM
Key developments that should provide more direction to U.S. markets later on Friday:
U.S. November employment report, University of Michigan Dec consumer sentiment and inflation expectations survey
ECOFIN EU finance ministers meet on blocs fiscal rules, attended by European Central Bank board member Luis de Guindos
U.S. corporate earnings: Hello Group, Johnson Outdoors, HashiCorp
U.S. November employment report, University of Michigan Dec consumer sentiment and inflation expectations survey
ECOFIN EU finance ministers meet on blocs fiscal rules, attended by European Central Bank board member Luis de Guindos
U.S. corporate earnings: Hello Group, Johnson Outdoors, HashiCorp
#69
dTraderB
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Posted 08 December 2023 - 07:45 AM
FED will dampen excessive optimism on RATE CUTS in first half if 2024. Of coursr, FED can cut ANY TIMR, no matter what the FED said before
"Investors are betting against the Fedtwice over. The first bet is the sudden turn from expecting the Federal Reserve to keep rates higher for longer to instead expecting rapid and deep cuts next year.
The second bet is almost the exact opposite, that the Fed will have to keep rates much higher in the long run than it says it will. Treasury yields have come down, but at around 4.1% the 10-year yield remains more than 1.5 percentage points above the Feds forecast of long-run interest rates."
WSJ
"Investors are betting against the Fedtwice over. The first bet is the sudden turn from expecting the Federal Reserve to keep rates higher for longer to instead expecting rapid and deep cuts next year.
The second bet is almost the exact opposite, that the Fed will have to keep rates much higher in the long run than it says it will. Treasury yields have come down, but at around 4.1% the 10-year yield remains more than 1.5 percentage points above the Feds forecast of long-run interest rates."
WSJ
#70
dTraderB
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Posted 08 December 2023 - 07:46 AM
"
The Fed is unlikely to entertain the idea of a March rate cut when it meets next week. It may stick to its wait and see narrative, or even reiterate that more work needs to be done to tackle inflation. The market may not believe much of it anyway, since it has mostly disregarded rhetoric that rates could stay higher next year.
That just leaves the data. The labor market and inflation cant run too hot if stocks are to end 2023 with a final festive flourish." - WSJ
FED will dampen excessive optimism on RATE CUTS in first half if 2024. Of coursr, FED can cut ANY TIMR, no matter what the FED said before
"Investors are betting against the Fedtwice over. The first bet is the sudden turn from expecting the Federal Reserve to keep rates higher for longer to instead expecting rapid and deep cuts next year.
The second bet is almost the exact opposite, that the Fed will have to keep rates much higher in the long run than it says it will. Treasury yields have come down, but at around 4.1% the 10-year yield remains more than 1.5 percentage points above the Feds forecast of long-run interest rates."
WSJ
Edited by dTraderB, 08 December 2023 - 07:47 AM.
